The Principles for Responsible Investment (PRI) has launched a new report as part of its ESG in Credit Ratings Initiative: ESG, Credit Risk and Ratings: Part 2 – Exploring the Disconnects. Last year, CBIS endorsed the first part of the initiative, the ESG in Credit Ratings Statement, calling on credit rating agencies to better understand ESG matters and their impacts to credit, and to incorporate ESG matters into credit assessments.
The new report focuses on materiality of ESG factors to credit risk, relevant time horizons to consider, organizational approaches to ESG, and communication and transparency.
Director of Catholic Responsible InvestingSM Tracey Rembert and Director of Investment Management Dean Armstrong met last fall with both Moody’s and S&P regarding incorporating ESG analysis into credit ratings. Tracey is also a member of the PRI’s Bondholder Engagement Working Group, which earlier this year released a new guide for investors, ESG Engagement for Fixed Income Investors: Managing Risks, Enhancing Returns.